Buffett/Berkshire - general news

[charlieruane]

Geopolitical risk seemed to be Buffett's primary concern, but he did cite "seismic action" once—though now I realize that was in the following CNBC interview, not at an annual meeting: 

 

There’s actually a danger of seismic action, I mean, and where they’re located. But that’s a low probability and they, you know, they’re smart people but would I rather have it, there was a U.S. domicile company than be a subject of who knows what, depending on conditions outside their control?

 

Transcript link.

[zippy1]

1 hour ago, charlieruane said:

Geopolitical risk seemed to be Buffett's primary concern, but he did cite "seismic action" once—though now I realize that was in the following CNBC interview, not at an annual meeting: 

 

There’s actually a danger of seismic action, I mean, and where they’re located. But that’s a low probability and they, you know, they’re smart people but would I rather have it, there was a U.S. domicile company than be a subject of who knows what, depending on conditions outside their control?

 

Transcript link.

He did say that. Although the whole Silicon Valley is in …

[Munger_Disciple]

Fellow Berkshire Groupies,

 

Andy Kilpatrick, who became famous for his massive books on Buffett, apparently became quite rich with Berkshire stock over many decades despite getting a few margin calls along the way. 

Does anyone know more about Andy's Berkshire stock investing? 

[OracleofCarolina]

I have never seen any stories on that, is he still making those books? 

[gfp]

43 minutes ago, OracleofCarolina said:

I have never seen any stories on that, is he still making those books? 

 

I don't think he still makes the books.  He tells some stories about the margin and first BRK share purchase in '83 here: https://www.youtube.com/watch?v=n6bPl1IXlhs

 

[Munger_Disciple]

4 hours ago, gfp said:

 

I don't think he still makes the books.  He tells some stories about the margin and first BRK share purchase in '83 here: https://www.youtube.com/watch?v=n6bPl1IXlhs

 

 

Thanks @gfp! I saw this video before; just wondering if there were any additional details. He referred to this in the video as you pointed out:

 

"I've had my setbacks yeah I've done some margin, my wife spends money you know but I still have that original share."

 

Good for Andy, it appears that he was able to survive that margin call & do well. 

Edited April 5 by Munger_Disciple

[John Hjorth]

10 hours ago, OracleofCarolina said:

I have never seen any stories on that, is he still making those books? 

 

10 hours ago, gfp said:

 

I don't think he still makes the books.  He tells some stories about the margin and first BRK share purchase in '83 here: https://www.youtube.com/watch?v=n6bPl1IXlhs

 

 

I agree with @gfp on this assessment.

 

The time span between each edition was on average a couple of years, give or take, and with some exemptions.

 

The so far last edition of the book was the 2020 Elephant Edition :

 

 

Topic about the book in the CoBF Books forum : Of Permanent Value - Andrew Kilpatrick.

[KPO]

https://www.dataroma.com/m/holdings.php?m=DJCO
 

Looks like the DJC board decided to sell down a portion of all four positions. 

[Hektor]

https://www.barrons.com/articles/berkshire-hathaway-geico-progressive-stocks-c03bcdf4

 

A 20% Job Cut at Berkshire’s Geico Highlights Challenge for Car Insurer

The company, formerly one of the fastest-growing big car insurers, has been shrinking in the past two years.

 

Geico reduced its staffing by 20% during 2023, giving up more than a percentage point of market share, as the auto insurer moved to retrench and regain profitability. It is the latest twist in a rivalry among some of the top companies in the car-insurance industry. Geico, formerly one of the fastest-growing big players and the jewel of Berkshire Hathaway ’s vast insurance operations, has been shrinking in the past two years. Its archrival, Progressive, has been expanding profitably and seeing its stock price surge.

 

[schin]

On 4/5/2024 at 4:56 PM, KPO said:

https://www.dataroma.com/m/holdings.php?m=DJCO
 

Looks like the DJC board decided to sell down a portion of all four positions. 

 

When Warren passes, I would expect there will be selling of his prized holdings too.

[gfp]

28 minutes ago, schin said:

 

When Warren passes, I would expect there will be selling of his prized holdings too.

 

I feel like the deferred tax liability will factor in heavily here and that he is spending a huge amount of time talking out these companies with Ted and Todd.  I would be really surprised to see a position like American Express or Coca-Cola messed with after Warren passes.  I could be wrong but my bet is that some of these are truly treated like the rest of the subsidiaries.

 

 

[schin]

15 minutes ago, gfp said:

 

I feel like the deferred tax liability will factor in heavily here and that he is spending a huge amount of time talking out these companies with Ted and Todd.  I would be really surprised to see a position like American Express or Coca-Cola messed with after Warren passes.  I could be wrong but my bet is that some of these are truly treated like the rest of the subsidiaries.

 

If professional sports are good reference points, nobody is sacred. The portfolio will be touched and redeployed. Look at DJCO, I mean.... Wells Fargo and Bank of America is being reduced nonetheless.

 

Whether it's Lou Simpson, Sir John Templeton, Teledyne under Henry Singleton, the position will be touched sadly.

[Munger_Disciple]

1 hour ago, gfp said:

 

I feel like the deferred tax liability will factor in heavily here and that he is spending a huge amount of time talking out these companies with Ted and Todd.  I would be really surprised to see a position like American Express or Coca-Cola messed with after Warren passes.  I could be wrong but my bet is that some of these are truly treated like the rest of the subsidiaries.

 

 

 

  I don't think it is a coincidence that Warren has recently been talking about Coke, Amex and Japanese trading companies in the annual reports. There is no way Berkshire will sell these post-Buffett. Is there a way Berkshire can distribute the large holdings in-kind to shareholders without incurring any corporate taxes? My guess is no. 

Edited April 8 by Munger_Disciple

[Spooky]

Ya apparently Lou Simpson begged Warren not sell their Nike position when he retired but Warren wasn't comfortable holding someone else's idea.

[charlieruane]

On 4/8/2024 at 10:30 AM, Spooky said:

Ya apparently Lou Simpson begged Warren not sell their Nike position when he retired but Warren wasn't comfortable holding someone else's idea.

 

Fascinating! Mind if I ask where you heard this?

[gfp]

2 hours ago, charlieruane said:

 

Fascinating! Mind if I ask where you heard this?

 

Warren told the story either at an annual meeting or in an interview.  Nike was the example but he had Lou liquidate his entire portfolio before he left.

[Spooky]

11 hours ago, charlieruane said:

 

Fascinating! Mind if I ask where you heard this?

 

Can't remember where I heard this unfortunately but here is an article talking about Buffett inheriting stock positions: https://www.cnbc.com/id/41868643

[Eldad]

Nike has been a great stock. It has always made me uncomfortable as well because it is all based on brand hype. Some good innovation, but mostly branding hype. 

[Spekulatius]

On 3/19/2024 at 10:37 AM, Intelligent_Investor said:

I feel like they always have, Warren once he got big enough knew one of the biggest risks to Berkshire was political risk so he wants no part in that at all

I agree the optics matter. Making $10 or $20M isn’t worth the headache for Berkshire. Think about this, if this becomes a political issue, it could mean that WEB get dragged in a Congress hearing to testify. Probably not worth it for him. 

 

[gfp]

HomeServices has settled their antitrust suit -

https://www.wsj.com/business/telecom/warren-buffetts-real-estate-firm-settles-antitrust-matter-for-250-million-e77e87d8

 

 

"

Dusseault said HomeServices faced potential bankruptcy if it didn’t settle. To even appeal the verdict it likely would have needed to post a bond, which a judge could have set in the billions of dollars. 

If Berkshire had instead stepped in to bail out its subsidiary, it would have set a precedent that could make other companies under its umbrella an appealing target for litigation. "

Edited April 26 by gfp

[cubsfan]

4 minutes ago, gfp said:

HomeServices has settled their antitrust suit -

https://www.wsj.com/business/telecom/warren-buffetts-real-estate-firm-settles-antitrust-matter-for-250-million-e77e87d8

 

 

"

Dusseault said HomeServices faced potential bankruptcy if it didn’t settle. To even appeal the verdict it likely would have needed to post a bond, which a judge could have set in the billions of dollars. 

If Berkshire had instead stepped in to bail out its subsidiary, it would have set a precedent that could make other companies under its umbrella an appealing target for litigation. "

 

Damn - that sounds bad. I didn't realize it was that dangerous.

[John Hjorth]

3 minutes ago, cubsfan said:

 

Damn - that sounds bad. I didn't realize it was that dangerous.

 

Yeah, The US justice system in operation and at its finest. Something to think about here.

[cubsfan]

 

3 minutes ago, John Hjorth said:

 

Yeah, The US justice system in operation and at its finest. Something to think about here.

 

 Isn't it the truth!!

[CassiusKing1]

Add on top of this the California Wildfire litigation.  

 

A company flush with cash has become a target.  I've trimmed my Brk holding due to this new era.  Sad.

[gfp]

Warren always said there are certain businesses where you aren't well served by having a "rich parent."  He never contemplated being a helmet manufacturer, was one of his examples if I remember correctly.  I think his mindset from the insurance industry has served him well over the years in considering as many risks in his other businesses as he can - which is why he gets a little crabby when he misses some.